1 STRATEGIC TRADE ACT 2010 FREQUENTLY ASKED QUESTIONS A. BACKGROUND OF STA 2010 Question 1 What is the Strategic Trade Act 2010? The Strategic Trade Act (STA) 2010 [Act 708], is the legislation that controls the export, transshipment, transit and brokering of strategic items and technology, including arms and related material, as well as activities that will or may facilitate the design, development, production and delivery of weapons of mass destruction. This Act is consistent with Malaysia's international obligations on national security. Question 2 Are there other related laws toSTA 2010? The written laws related to STA 2010 are: 1. Animals Act 1953 (Act 647) 2. Atomic Energy Licnsing Act 1984 (Act 304) 3. Chemical Weapons Convention Act 2005 (Act 641) 4. Customs Act 1967 (Act 235) 5. Pesticides Act 1974 (Act 149) 6. Plant Quarantine Act 1976 (Act 167) 7. Prevention and Control of Infectious Diseases Act 1988 (Act 342) 8. Protection of New Plant Varieties Act 2004 (Act 634) 9. Poisons Act 1952 [Act 366] 10. Malaysian Communications and Multimedia Commission Act 1998 [Act 589] Please also take note that in the event of any conflict or inconsistency between the provision of this Act and those of any written laws (in relation to the prevention of the proliferation of WMD and its delivery system), including the related laws, the provision of this Act shall prevail and the conflicting or inconsistent provisions of the other written laws shal, to the extent of the conflict or inconsistency, be deemed to be superseded.
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STRATEGIC TRADE ACT 2010
FREQUENTLY ASKED QUESTIONS
A. BACKGROUND OF STA 2010
Question 1
What is the Strategic Trade Act 2010?
The Strategic Trade Act (STA) 2010 [Act 708], is the legislation that controls the export,
transshipment, transit and brokering of strategic items and technology, including arms and
related material, as well as activities that will or may facilitate the design, development,
production and delivery of weapons of mass destruction. This Act is consistent with Malaysia's international obligations on national security.
Question 2
Are there other related laws toSTA 2010?
The written laws related to STA 2010 are:
1. Animals Act 1953 (Act 647)
2. Atomic Energy Licnsing Act 1984 (Act 304)
3. Chemical Weapons Convention Act 2005 (Act 641)
4. Customs Act 1967 (Act 235)
5. Pesticides Act 1974 (Act 149)
6. Plant Quarantine Act 1976 (Act 167)
7. Prevention and Control of Infectious Diseases Act 1988 (Act 342)
8. Protection of New Plant Varieties Act 2004 (Act 634)
9. Poisons Act 1952 [Act 366]
10. Malaysian Communications and Multimedia Commission Act 1998 [Act 589]
Please also take note that in the event of any conflict or inconsistency between the provision
of this Act and those of any written laws (in relation to the prevention of the proliferation of
WMD and its delivery system), including the related laws, the provision of this Act shall
prevail and the conflicting or inconsistent provisions of the other written laws shal, to the
extent of the conflict or inconsistency, be deemed to be superseded.
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Question 3
Why was the Act enacted?
In 2004, the United Nations Security Council passed a Resolution which requested member
states to establish an export control system for the purpose of non-proliferation of weapons
of mass destruction. As a member state, we are requested to control exports of strategic
products which may be used for non-proliferation of weapons of mass destruction activities.
Question 4
How does the Act benefit Malaysia?
The enactment and implementation of STA 2010 will benefit Malaysia in terms of:
(i) enhancing Malaysia‗s image and building confidence among foreign investors to invest
in Malaysia;
(ii) facilitating and managing the exports of high technology goods and components from
Malaysia to other countries;
(iii) protecting Malaysia and Malaysian exporters from being exploited by proliferators and
those that profit from their activities without compromising legitimate trade of strategic
items; and
(iv) promoting Malaysia as a safe country to trade with.
Compliance with this international obligation will also enable Malaysia to contribute to the
maintenance of international peace and security by combating the proliferation of weapons of mass destruction.
Question 5
Who is the target of this Act?
The target is any person who is engaged in the activities of export, transshipment, bringing
into transit or brokering of strategic items. This includes exporters, traders, manufacturers,
brokers and others who have ownership of the product when it is exported. It also includes
the activity of a person who either in his own behalf or acting as an agent on behalf of
another person and is directly involved in the negotiation, purchase, financing, conveying,
buying, selling and supply of such items.
Question 6
How does one comply with the Act?
Whenever a person/ an entity performs any activity related with export, transshipment,
transit and brokering of listed and unlisted strategic items, they must obtain a permit
/broker registration certificate from the relevant Authorities and keep records of
transactions and relevant documents for a period required by the law.
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Question7
How can I know more about STA 2010 and its implementation?
You are welcomed to contact the Secretariat via e-mail [email protected] or our
hotline number, 03-6200 0585 for any clarifications pertaining to STA 2010.
B. DEFINITIONS AND CONTROLLED ACTIVITIES
Question 1
Why should I be concerned with export control compliance?
Those violating the Act are subjected to heavy penalties as prescribed in STA 2010.
Question 2
What is defined as export?
Export means:
(i) to take or cause to be taken out of Malaysia any items by land, sea or air, or to place any
items in a conveyance for the purpose of such items being taken out of Malaysia by land, sea or air; or
(ii) to transmit technology by any means to a destination outside Malaysia, and includes any
oral or visual transmission of technology by a communication device where the
technology is contained in a document the relevant part which is read out, described or
otherwise displayed over the communications device in such a way as to achieve similar result (―Intangible Technology Transfer‖).
Question 3
What is defined as “bring in transit”?
"Bring in transit" means to bring items from any country into Malaysia by land, sea or air,
where the items are to be taken out from Malaysia on the same conveyance on which they
are brought into Malaysia, or any other conveyance and whether or not such items are
landed or transshipped in Malaysia, but does not include the passage through Malaysia in
accordance with international law of a foreign conveyance carrying any items.
Question 4
What is defined as "tranship”?
"Tranship" means to remove items from the conveyance on which they were brought into
Malaysia and to place the items on the same or another conveyance for the purpose of
taking them out of Malaysia where these acts are carried out on a through bill of lading,
"Brokering" refers to the activity of a person who either on his own behalf or acting as an
agent on behalf of another person which negotiates, arranges for or facilitates the
purchasing, financing, conveying, sale or supply of items; or buys, sells or supplies such
items.
Under STA 2010, a broker is required to be registered under section 19 of the Actand holds
a valid broker certificate from the relevant Authority under the related laws to broker strategic items if he/she:
(i) is notified by the relevant Authority or an authorised officer;
(ii) knows; or
(iii) has reasonable grounds to suspect
that such strategic items are intended or likely to be used, wholly or in part, for or in connection with a restricted activity.
Question 6
Who falls under this definition of brokers?
A broker can be a person or company, who or which is involved in the brokering activities
including transaction of strategic items in a foreign country and exporting them to another foreign country. The strategic items transacted may or may not pass through Malaysia
C. CLASSIFICATIONAND STRATEGIC ITEMS LIST
Question 1
What are the strategic items?
Strategic items refer to goods and technology that are controlled under the STA 2010. A
definitive and comprehensive list of strategic items is prescribed in the Strategic Trade
(Strategic Items) Order 2010. The Order reflects the items currently required to be
controlled under the internationalexport control regimes as well as the relevant United Nations Security Council Resolutions.
The items are categorized as follows:
Category ML : Military items;
Category 0 : Nuclear materials, facilities and equipment;
Category 1 : Special materials and related equipment;
Category 2 : Materials processing;
Category 3 : Electronics;
Category 4 : Computers;
Category 5 : Telecommunications and information security;
Category 6 : Sensors and lasers;
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Category 7 : Navigation and avionics;
Category 8 : Marine; and
Category 9 : Aerospace and propulsion
The list of Strategic Items can also be viewed in MITI‗s website via the link
www.miti.gov.my> STA 2010 > Strategic Items under the STA 2010.
Question 2
How will I know if the items to be exported from Malaysia are listed in the
strategic items list?
It is the responsibility of exporters to determine if their products are listed as strategic
items and to obtain a permit prior to export of such items.
The strategic items list is a transparent list and published in the Gazette as the Strategic Trade (Strategic Items) Order 2010.
The Strategic Trade (Strategic Items) Order 2010 is available (upon subscription) at
the http://www.lawnet.com.my or can be purchased from PercetakanNasionalBerhad.
Exporters may also check the list of items by logging on to www.miti.gov.my > STA 2010 >
Strategic Items under the STA 2010.
Question 3
Can an item that is deemed non-strategic under foreign governments’ export
control law be exempted from an export permit under STA 2010?
Malaysian companies need to comply with Malaysia‘s STA 2010 and refer to the Strategic
Trade (Strategic Items) Order 2010 to determine if their product is controlled or not. As
long as the items are listed as strategic items in the Strategic Trade (Strategic Items) Order
2010, an STA permit is required. However, companies need to also conduct their due
diligence if their items are categorized as unlisted under STA 2010, which also requires
them to apply for pemit.
Question4
What is Category Code and how is it different from the Customs Harmonised
Commodity Description and Coding System (HS Code)?
A Category Code is an alpha-numeric classification used in the Strategic Items List to
identify controlled items and to determine the relevant authority involved in issuing the
export permit.
It is different from the Customs Harmonised System Codes (HS Code), which is used by
Customs to determine import duties and collect trade data and statistics.
The Category Code has 5 characters, for example, 1A002, 4D003, or 9E102. There are 11
categories on the Strategic Items List. The first number of the Category Code identifies the
category to which it belongs, for example, ML = Military List, 1 = Special materials and
related equipment, 4 = Computers, or 9 = Aerospace and Propulsion.